Stories about vice-chancellors’ large salaries have led people to ask whether universities provide value for money. We should begin by tackling the question of how we meet infrastructure costs, argues Gill Evans, emeritus professor of medieval theology and intellectual history at the University of Cambridge

“Value for money,” said Jo Johnson in a speech in July 2017, is “an increasingly pressing issue in higher education”. When students grumble that they are not getting value for money because some of their tuition fees are being used to pay for the provision of more expensive courses for other students, or for the salary of the vice- chancellor, they have a point.

This complaint has been growing for some time. It is not a student complaint that is going to go away. It is an unavoidable consequence of the shift from the block grant of public funding to paying for tuition through individual student fees. Under the former system, the provider could divide the block grant as it chose, but now if it takes a proportion of the fees of a student in a low-cost subject to cover the costs of a student in a high-costs subject, student discontent is understandable.

The vice-chancellor’s salary, though recently a prominent issue in itself, can be seen as shorthand for the cost of management and administration. Here again students complain that a proportion of their fees is being spent not on teaching them but on a growing legion of back-office tasks. The number and proportion of management posts has indeed markedly increased in most providers in recent years, not least as a consequence of the costs of compliance with the Research Excellence Framework (REF), the Teaching Excellence Framework (TEF) and now the Knowledge Exchange Framework (KEF) requirements and with a number of requirements of employment law and Government policy directives. HESA data even in 2015 showed that two thirds of UK universities had more management than academic staff.

Criticism was heightened before the budget of November 2017 by rumours that universities had actually been profiting from tuition fee income and the chancellor of the exchequer was considering cutting the maximum level of the fee and providing a publicly-funded top-up to fund expensive courses.

Who pays for infrastructure?

It is certainly true that arts and humanities courses are likely to cost less to deliver than STEM courses. The difference lies in the infrastructure needed, laboratories and libraries and for music and art special equipment and facilities.

At present these infrastructure costs are being met in various ways. Libraries and laboratories may be funded out of the ‘R’ (‘Research’) part of the remaining block grant awarded by the finding councils to research-active providers on the basis of their performance in the REF. Such facilities will then be available for use by students on undergraduate taught courses.

Students of such subjects as music, dance, art and fashion may be expected to pay for the infrastructure equipment needed. London Metropolitan University warns students on its Music Business and Live Entertainments BA (Hons) degree about additional costs:

Additionally, there may be other activities that are not formally part of your course and not required to complete your course, but which you may find helpful (for example, optional field trips). The costs of these are additional to your tuition fee and the fees set out above and will be notified when the activity is being arranged.

All this points to the need for a hard detailed analytical look at the way infrastructure costs are being met in individual institutions. Such costs would be difficult to break down in such a way as to cost separately the part which benefits undergraduates, the part that benefits postgraduate students and the part which benefits researchers. Postgraduate students are affected in complex ways because they may have studentships funded by the project funder that will have received assurances provision about infrastructure from the host institution as a condition of the grant. Even management costs could be considered part of infrastructure, certainly those involved in providing student counselling and complaint and other student support services.

What about the taxpayer?

Much of Jo Johnson’s July speech was directed at “value for money” for the taxpayer as well as the student:

Students taking out taxpayer-backed loans to attend university rightly expect the highest quality teaching and to secure good labour market outcomes that justify their investment of time and money.

The arrangement between government and HEFCE was formerly that taxpayers provided a grant to HEFCE, with priorities set out in an annual letter from the Secretary of State, which was distributed to providers in blocks by HEFCE. Between HEFCE and the provider stood a Financial Memorandum of Assurance and Accountability, formally known as the Financial Memorandum and each provider would publish the account it sent to HEFCE each year.

Until the bulk of tuition funding ceased to be public funding and became private student funding, though relying on taxpayer funding through the Student Loans Company, this created no high level of student expectation that they should look for “value” for their own money in their degree courses and subsequent employment opportunities.

Assessing value for money is about to become more complicated

This arrangement will change further and radically with the coming into force of the Higher Education and Research Act 2017. The teaching side of student provision will fall under the Office for Students and the infrastructure funding for research under Research England within UK Research and Innovation. Research students are intended to be looked after by collaborative effort between OfS and UKRI but it is not yet quite clear how.

That will be far broader than the range of the former ‘R’ funding to institutions:

This includes providing grant funding to English universities for research and knowledge exchange activities; developing and implementing the Research Excellence Framework in partnership with the UK Higher Education funding bodies; overseeing the sustainability of the Higher Education research base in England; overseeing the £900 million UK Research Partnership Investment Fund; and the Higher Education Innovation Fund (HEIF).

This seems likely to complicate enormously the task of assessing value for money from the student point of view. It certainly strengthens the case for hard thought about the way infrastructure provision is working at present and where it fits into the discussion of student “value for money”. Little recent attention appears yet to have been paid to it